Housing

Sophomore Residency Study Summary

Purpose and Approach

In early 2008, Ohio State President E. Gordon Gee announced that the University was considering the enforcement of a long-standing on-campus residency requirement for sophomores attending the Columbus campus. The University's stated goals for requiring sophomores to reside on campus include: creating a more vibrant learning environment outside the classroom, improving academic performance, shortening the time it takes students to graduate, and keeping students involved in the campus community.

Campus area landlords expressed concern over the impact that the sophomore residency requirement enforcement would have on the private student rental housing market. Campus Partners, in association with off-campus landlords, retained VWB Research for the purpose of supplying supportive and verifiable data on student rental housing in the University District Area.

Methodologies

Initial research indicated that OSU does not maintain current addresses on all students. Thus, there was no way to locate students for study area delineations without approaching them directly. In the absence of existing data, two tools were used to locate concentrations of off-campus student housing: (1) the student survey administered under this study and (2) maps marked by stakeholders during interviews.

After establishing five study areas with significant student resident concentrations, VWB Research collected data using demographic services, supply documentation, Internet research, OSU statistics, student housing surveys, case study research, and stakeholder interviews.

This study: (1) defines current on- and off-campus student rental housing in terms of location, number, condition, cost, and occupancy; (2) ascertains student attitudes about rental housing choices; (3) determines the off-campus rental market impact of all sophomores remaining on-campus to live; (4) establishes supply and demand values for on- and off-campus markets under various University residency requirement scenarios; (5) demographically describes significant off-campus student housing markets; (6) documents stakeholder perceptions of University housing initiatives; and (7) performs case study research on universities with related student housing issues.

On-Campus Housing Supply

The current University housing system consists of approximately 10,180 beds, 8,850 for undergraduate students and 1,350 for graduate students. In 2012, when the University’s current residential capital improvements plan is complete, it is projected that total bed capacity will decrease to 9,800, as new beds will be more than offset by those lost to density reductions. Average monthly per person housing costs for residence halls is $630.

Based on student surveys, residents of on-campus housing ranked Internet service, washer/dryer machines, and central air-conditioning as their most important features. Survey respondents reported that they liked on-campus living because of its convenience to classrooms/events, proximity to work, and better security. The least satisfying aspects of on-campus housing were limited parking, high costs, and crowded living conditions.

In a survey of students who had decided not to continue living on campus, nearly 80% indicated that they had been satisfied with their on-campus housing. However, of all students responding to another survey, only 10% indicated a desire to live on campus.

Given the high importance students placed on central air-conditioning, the capital improvements plan should increase this rate, as only 60% of University housing is currently air-conditioned. This disconnect between the high satisfaction rates of on-campus housing with the low percentage of students who desire to live on campus indicates that current on-campus housing does not offer the product and/or environment that students seek. Complaints about mismatched roommates, noisy neighbors and ineffective housing staff also appeared in the surveys.

On-Campus Housing Demand

Given the freshman on-campus residency requirement, current on-campus housing demand of 10,270 beds exceeds available supply by fewer than 100 beds. However, after completion of the capital improvements plan in 2012, and after bed capacity decreases to 9,800, on-campus demand could exceed supply by nearly 500 beds.

Based on historic enrollment trends and the University’s expectation that enrollment will remain flat for the next five years, VWB Research estimates that 15,700 freshmen and sophomores will be enrolled at OSU each year between 2009 and 2013.

Compared to the post-improvement plan bed count of 9,800, approximately 4,100 additional beds will be required to house freshmen and sophomores on-campus. An additional 2,000 beds (6,100 total new beds) will be needed if the University wants to serve the juniors, seniors, and graduate students who traditionally choose to remain on-campus.

Off-Campus Rental Housing Supply

For the off-campus rental housing market, VWB Research identified one Primary Study Area (PSA) and four Secondary Study Areas (SSAs) in which a significant number of OSU students reside. The PSA comprises most of the University District Area, and contains the highest concentration of OSU students of any study area.

VWB Research estimates that there are 22,000 beds available for rent in the PSA and an additional 28,000 beds in the four SSAs.

Based on field inspections by VWB Research staff of a significant sampling of off campus rental units, private rental properties appear to be well maintained and include an above-average level of amenities on the interior of units. However, landlords do not appear to be investing equally in the exterior of their properties. A survey of OSU off-campus rental housing residents indicated that students were generally satisfied with the quality and management of their off-campus living arrangements. Off-campus students typically share bathrooms with one other person, while bedrooms are usually private.

Off-Campus Rental Housing Demand

VWB Research estimates that out of 53,000 total OSU students, 34,000 (64%) live in off-campus rental housing (anywhere), of which 15,000 live in PSA rental housing and another 8,000 live in SSA rental housing. VWB Research estimates that 20% of all OSU students living in PSArental housing are sophomores (3,000). Another 1,000 OSU sophomores are estimated to live in rental housing within the four SSAs.

The overall occupancy rate in 2008 for surveyed rental housing in the PSA was 99.4%, while the 2000 Census reported a 94.9% occupancy rate for rentals in the PSA. Among the reasons cited by landlords for the increased occupancy rate was the opening of the South Campus Gateway development. If the 3,000 OSU sophomores living in the PSA are required to live on-campus, this 99.4% occupancy rate could drop to 79.5%, unless replacement support is found.

Among all five study areas, the PSA will be affected most adversely by the loss of sophomores to on-campus living.

Increased demand for rental housing within the PSA and SSAs is explained by lower costs. On average, VWB Research estimates that off-campus housing costs $430 per person per month, $200 less than on-campus housing ($630). In addition to affordable rents, occupancy rates within the PSA are increasing due to: (1) new businesses along an improving High Street corridor, (2) reduction in student instigated conflagrations, (3) better cooperation between University and Columbus police, (4) slumlords and absentee landlords disposing of their portfolios, (5) difficulties and the high cost of commuting to campus, and (6) improved living conditions from landlord reinvestment.

Case Study Lessons

VWB Research evaluated the off-campus market impact of various housing policies and strategies at four other universities. Brief case study summaries follow:

• University of Georgia, Athens, Georgia – implemented freshmen on-campus residency requirement in 2004. In order to house all freshmen, the university added 1,000 new beds in one year. These beds were in addition to 3,000 beds that were added to the off-campus market between 2000 and 2004. The combined result of the large number of new beds, both on and off campus, and all freshmen moving on campus was a decrease in the off campus occupancy rate from 95% to 82%. However, rental rates remained stable. In spite of market softness, newer more expensive product gained occupancy at the expense of older apartments and single-family rental homes. Less desirable rental properties vacated first.
• Miami University, Oxford, Ohio – will implement sophomore on-campus residency requirements beginning the 2009-2010 academic year. The university does not plan to add new beds to their current on-campus housing system. Sophomores will displace a like number of upperclassmen that are currently choosing to live on-campus. It remains to be seen whether the displaced upperclassmen will choose to live in the off-campus housing being vacated by sophomores. There is some concern that upperclassmen may prefer a quieter, more private housing arrangement, and that they may choose to live further away from campus.
• University of Dayton, Dayton, Ohio – no policy change. Over the past 30 years, the university has acquired 328 apartment units with 1,430 beds in off-campus neighborhoods adjacent to its campus. This acquisition strategy replaced the need to develop additional on-campus beds and allowed the university to play a role in stabilizing adjacent deteriorating neighborhoods. Competition between the university and private landlords in the off-campus rental housing market has proved beneficial to students by improving quality and lowering rents.
• University of Illinois, Champaign, Illinois – no policy change. The university has operated a Certified Housing Program for fifty years to meet their student housing needs. To qualify for the program, private landlords must: (1) provide educational programming, (2) establish emergency preparedness procedures, (3) comply with city, state, and federal codes, (4) enforce the university’s Code of Campus Conduct and (5) operate at the discretion of the university in terms of compliance and need. Private landlords retain tenants (who would otherwise live on-campus) and maintain high occupancy levels, while the university secures additional housing capacity that meets its specifications without having to build it.

Primary Conclusions

While the report includes significant demographic data and information pertinent to the PSA and SSAs, the conclusion relevant to the study’s main purpose (potential impact of OSU residency requirements on off-campus student rental housing markets) remains independent of improving academic performance, since student survey data indicates a slightly higher academic performance for off-campus students. However, the following seems relevant:

If 3,000 OSU sophomores are removed from the PSA rental housing market at one time to live on-campus and replacement users are not found, the occupancy rate in PSA rental properties would decrease from 99% to 80%. However, this potential decline represents a worst-case scenario and could be minimized through an appropriate phasing of new on-campus beds (and the sophomore requirement). At more typically stabilized occupancy levels of 95% and over a multi-year implementation period, replacement users could be found for vacated PSA rental units from the following sources:

• OSU upperclassmen (non-freshmen/sophomores) either displaced from on campus housing by incoming sophomores or living in off-campus rental housing outside of the five study areas. This assumes landlords can deliver the housing product and environment they seek, and capitalize on the commuting difficulties encountered by this group. Since this group is estimated to be about 11,000 students, PSA landlords would have to capture about 25% of them to fully replace the lost sophomore market.
• OSU freshmen and sophomores via University involvement in off-campus housing. This could be through purchase and renovation (University owned/operated) or contracts with landlords under a certified/affiliated housing program.
• Non-OSU students attending other Columbus colleges; non-student renters from outside the market area; and OSU faculty and staff via conversion of vacated rental property to homeownership.

Secondary Conclusions

• Off-campus landlords have done an effective job in adapting to the changing desires of students, at least within units of rental property buildings. Less attention has been devoted to building exteriors and grounds. Landlords have significantly improved the quality of study area rental housing over the past ten years by purchasing and renovating neglected properties, reinvesting profits to further upgrade properties, and becoming more involved in the welfare of their student tenants.
• Students clearly prefer off-campus rental housing to on-campus housing since it is less expensive, more private, less restrictive, and more feature-ladened. This is particularly true in the PSA where large multiple-bedroom rental units (houses) mimic residence hall living without University oversight. However, current and planned improvements to the University housing system could increase demand for on-campus living.
• VWB Research estimates that off-campus neighborhoods (the five study areas) could support or absorb an additional 400 beds of growth per year, if housing providers deliver proper designs, in good locations, at varying price points.
• The cost disparity between on-campus and off-campus housing needs to be carefully considered. Surveys show that older students are more likely to pay for their own housing costs; therefore, they are more price-conscious when selecting housing
• University certified/affiliated housing, owned and operated by the private sector, is a way for universities and landlords to partner in a mutually beneficial enterprise. For universities, it is an economical way to deliver quality housing without expending valuable on-campus land and debt capacity. For the private sector, certified housing guarantees very high occupancy rates, and retains tenants who would otherwise be forced to live on-campus. However, the farther this housing is located away from the University core, the less likely it will create the type of academic community envisioned by President Gee.